whole point of insurance is that you pay for avoiding risk

in other words, you pay more than you would on average loss from bad events - but you avoid catastrophic losses that would break your life

that is why insuring your phone is likely a bad idea (as you can pay for a new one) but liability insurance or insuring your home/flat may make sense

> If it has to make any profits - or at least pay salaries - it's guaranteed to be a bad deal for everyone.

paying 3k per year, to avoid 1% risk of 250k losses may be a good idea, especially if 3k loss is survivable without trouble and 250k loss would be more than 90 times worse.

> paying 3k per year, to avoid 1% risk of 250k losses may be a good idea

You are basically guaranteed to pay 3k to avoid financial risk with a mean value of 2,5k. That sounds like a fallacy to me (isn't it the same as saying that paying 3k for 1% chance of winning 250k is a good idea?), may make sense psychologically though.